Washington— The US Department of Energy on Wednesday announced $2.8 billion in funding across 12 states for the production of electric vehicle batteries. None of the projects — most of which focus on battery ore processing or component manufacturing — are in Michigan, which remains the nation’s largest auto-producing state.
When asked why, DOE officials who spoke on condition of anonymity said the reason was twofold: there was a rush to invest in battery cell manufacturing after the adoption of the Inflation Reduction Act, which reduced the need for federal funding for this stage. .
And on the other hand, the agency wanted to select projects located close to the supply of raw materials or close to their customers. Michigan’s Upper Peninsula is home to the only nickel mine in the United States, one of the essential components of electric vehicle batteries.
But that doesn’t mean Michigan won’t benefit from the influx of cash: It’s targeting a part of the electric vehicle battery supply chain that’s particularly weak in the United States right now, experts say. and strengthening those ties will help Michigan-based businesses. as they pivot to electric vehicles.
There has been rapid growth in battery cell and battery assembly plants over the past three years, including in Michigan, said Sam Abuelsamid, principal research analyst at Guidehouse Insights.
“But you have to have all these other components to produce these cells,” he said. “We are now starting to see the rest of that national supply chain fill in, and that will help make the whole industry more resilient to future shocks.”
DOE officials said there would be multiple rounds of funding, and Michigan projects may receive funding in the future depending on “what part of the supply chain we’re solving for.” The $2.8 billion funding is the first round of battery investment from the bipartisan Infrastructure Act, which was signed into law last year. The law allocated more than $7 billion for critical electric vehicle battery materials and components.
The states whose projects receive funding include Alabama, Georgia, Kentucky, Louisiana, Missouri, Nevada, New York, North Carolina, North Dakota, Ohio, Tennessee and Washington. Most of the projects are in the southeastern states, an area of mostly foreign, non-union automakers that is becoming known as the “Battery Belt”.
Only one project is in another Midwestern state: Cirba Solutions will receive $75 million to expand a lithium-ion battery recycling facility in Lancaster, Ohio.
Selected companies must match or exceed federal funding, totaling $9 billion in battery supply chain investments between private sector and federal dollars. Administration officials estimate that the investments will create 3,000 temporary jobs and 5,000 permanent jobs.
Selected projects will include production of an electrode binder that can meet approximately half of projected US demand for electric vehicle batteries through 2030; a lithium processing facility in North Carolina; and the first lithium-iron-phosphate cathode installation in the United States
They will help create enough battery-grade lithium to power 2 million electric vehicles a year, enough graphite for 1.2 million electric vehicles and enough nickel for 400,000 electric vehicles, officials said.
President Joe Biden said the funding is part of preparing the United States to compete in “the most important economic transitions since the Industrial Revolution.”
“The demand for critical materials is expected to skyrocket 400 to 600 percent over the next few decades,” he said at a White House event on Wednesday. “Some see a challenge, but we see an opportunity to move to a net zero world.”
The supply of minerals such as graphite, nickel, lithium, cobalt and manganese is unlikely to keep pace with demand as electric vehicle production increases. Industry leaders and policy makers have identified mineral production and processing as major bottlenecks in the transition from gasoline vehicles.
While Michigan is home to the country’s only nickel mine, most of the production of lithium and other materials occurs elsewhere in the country – a reality based on each region’s unique geology.
“There will always be some degree of sprawl (production) depending on where the materials are in the ground,” Abuelsamid said. “So you have to be realistic about that.”
Otie McKinley, spokesman for the Michigan Economic Development Corp., said it was “disappointing” that Michigan was not selected for this round of funding, but that the state is “successfully competing against other significant federal funds to support this critical electric vehicle and mobility ecosystem.”
Bobby Leddy, spokesman for Democratic Gov. Gretchen Whitmer, said the battery manufacturing gigafactories located in Michigan – including recently announced plans for Our Next Energy in Van Buren Township and Gotion in Big Rapids – “ will need to source parts from across the country, so we’re glad the federal government is making sure these components are made in the United States.”
“We are working to win (future federal grants) through our congressional delegation to continue to create thousands of jobs, secure billions in additional investments, and grow Michigan’s economy,” a- he declared.
The administration also announced Wednesday that it is launching the American Battery Materials Initiative, a plan to align investments across multiple agencies to expand battery mineral production and processing to meet the future needs of the automotive industry. in batteries.
Biden has made accelerating the transition to electric vehicles a top priority of his administration. Since taking control of the White House and both houses of Congress, Democrats have spent billions to support electric vehicle charging, consumer tax credits, production and processing of critical minerals , electric vehicle and battery manufacturing and grid resilience.
The global auto industry plans to invest about $515 billion over the next 10 years to develop and build electric vehicles, according to the Alliance for Automotive Innovation. Over $98.6 billion has been invested in the United States
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